New Zealand’s earthquake recovery slow

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Two years after an earthquake devastated New Zealand’s second largest city, killing 185 and rattling Phil Thompson’s suburban house off its foundations, the 65-year-old retiree still lives in a cramped trailer home parked on the incongruously neat lawn in front of his twisted wooden bungalow.

Thompson, along with virtually everyone else in Christchurch, had thought the city would be closer to recovery by now. Instead he and his partner are resigned to spending a third southern hemisphere winter in the poorly insulated camper, venturing into the sagging house to use the toilet. Downtown, a temporary shopping centre in brightly coloured shipping containers has become a symbol of resilience, but most of the historic centre remains a post-apocalyptic ghost town. “Beyond The Cordon” bus tours take sightseers behind chain-link security fences to see the ruins of the February 22, 2011, quake.

Christchurch is but one example of how even the wealthiest countries struggle to recover from large-scale catastrophes. In some cases, developing countries may be better off. Within two years of a 2004 tsunami, half the 100,000 permanent homes needed in Indonesia had been completed, and almost 700 schools had been built or repaired. But in Japan, nearly two years after the March 2011 tsunami flattened the northeast coast, few homes have been rebuilt.

“Many people in developing countries don’t rely much on governments, and even after a disaster, they just go ahead and do it,” said Peter McCawley, an economist at the Australian National University and a specialist on disaster relief policy. “They often do it to low standards, but they just go ahead and fix it anyway.”

Conversely, disaster agencies in the wealthiest countries have become “far too bureaucratic and tied up in rules,” he said from Jakarta, where he is on leave to work on an aid project.

A major bottleneck in Christchurch is insurance. Most claims haven’t been paid, as insurance companies and a government insurance fund that covers damage up to $US85,000 tussle over who should pay for what. Continuing aftershocks - topping 11,000 last month - have added to the delays, as insurers wait for the ground to become more stable.

“It would have been totally irresponsible to have set about rebuilding somebody’s house ... whilst the ground is shaking, only to have it severely damaged again or destroyed by the next quake that comes along,” said Tim Grafton, chief executive of the New Zealand Insurance Council, an industry group.

Insurers have only been able to contemplate starting major repair work in the past six months, he said. Some had reimbursed homeowners for repairs after a September 2010 earthquake, only to see the same homes flattened five months later by the February quake, which left 14,000 homes either destroyed or condemned.

“A lot of my constituents are looking to me and saying, ‘Well gosh, we’ve been told by our insurer that we’re not even going to really know what’s going to happen for us until 2015,’ “ said Lianne Dalziel, an opposition lawmaker who represents Christchurch’s ravaged eastern suburbs. “This is psychologically debilitating.”

Thompson wasn’t insured, which he has come to regard as a blessing as others battle for payouts.

His problems started after his neighbourhood was rezoned “orange,” and then “Technical Category 3,” the least stable outside the now off-limits red zones. He hasn’t been able to lay a new foundation, he said, because the national government keeps changing the requirements for soil testing and foundation design in his zone.

“We’re still waiting, waiting, waiting for bureaucracy to come out with what they’re going to need. They keep changing their mind and that’s what I’m stuck with,” he said outside his 69-year-old home, now perched precariously on wooden blocks. “Looks like another winter in the caravan again.”

The Ministry of Business, Innovation and Employment said in a statement that its guidance document for repairing and rebuilding houses had “fundamentally remained the same,” although it has been “updated, clarified and made more accessible.”

Thompson and his partner Debra Savage rely on a garden tap for drinking and cooking water. They drive 9km three times a week to shower at a friend’s home. The electricity remains disconnected because of fire and electrocution risks from damaged wiring. He still pays full property tax on the house, and a city official challenged him for having an unapproved shipping container on the property to store salvaged belongings. The official later relented, accepting that it could be classified as a temporary fixture because of emergency circumstances.

“You’d be better off in a Third World country,” Thompson said. “You could get on with your life.”

But Mark Skidmore, a Michigan State University economist who has studied the impacts of natural disasters, said wealthy countries generally fare better.

He has co-authored studies with Japanese economist Hideki Toya that show that as economies develop, they suffer fewer disaster-related deaths and less damage as a proportion of GDP. While not directly comparable, the 2011 tsunami killed 19,000 in Japan, while about 230,000 perished in the 2004 tsunami in Indonesia and 11 other countries.

“Wealthy countries are able to rebound more quickly than poorer countries,” Skidmore said. “Highly developed insurance and financial markets enable resources to flow into affected areas more quickly. Higher levels of income and other resources, including effective government operations, is also important.”

Indonesia in some ways was an exception, because so much aid money flowed in, and it was relatively well managed. Haiti is still struggling to come back from a massive earthquake that struck its densely populated capital three years ago, the slow recovery attributed largely to political dysfunction and the magnitude of the disaster.

In Christchurch, Mayor Bob Parker said rebuilding houses could take another two years to complete, while bigger projects such as a hospital, convention centre and performing arts centre may require six. The shipping-container mall, with bank branches, fashion shops and a two-story cafe, has become a vibrant though temporary new city heart amid the rubble and din of heavy machinery demolishing condemned buildings.

“We are on the cusp, really, of that full-speed rebuild,” he said from the high-rise city council building near the downtown disaster area. “All the plans have been laid, the rebuild is ramping up all the time.”

The city’s population has declined by 13,500, or 3.6 per cent, from the 380,000 people it had before the magnitude 6.3 earthquake. Some have left by choice; others because they had nowhere left to live. Parker predicts a rebound as the US$29.5 billion reconstruction gathers pace, powering an anticipated economic boom that would draw in outside workers.

“Two years down the track, I think we’ve made amazing progress,” he said. “It’s never as fast as anyone would imagine because the scale has been huge,” he said.

The earthquake is the costliest natural disaster in New Zealand history. It is expected to exhaust the NZ$6 billion held by the Earthquake Commission, the government insurer created after a 1931 quake killed 256 and led private insurers to limit their coverage. Taxpayers will have to meet the commission’s further costs.

The slow progress in Christchurch is typical of a major disaster in a wealthy country, said Paul Dalziel, an economist at Lincoln University outside Christchurch and the sister of the opposition lawmaker. As part of a global network developing new disaster recovery protocols for rich countries, he has been studying the magnitude 6.3 earthquake that claimed 309 lives in L’Aquila in central Italy in 2009.

“It’s a universal problem that when an event of this scale occurs, it’s not easy for individuals to make decisions because they have such widespread ramifications,” said Dalziel, whose home was damaged in the quake. “I don’t think it’s to criticize anybody in particular. It’s just a reality that we don’t cope well with disasters of this scale.”